One of the best things you can do for your finances and your tax efficiency is to take a look at your tax options near the beginning of the year and see what might be available.
In recent years, green tax credits have been quite popular. Some of these credits have expired. However, there are green tax credits still in effect for the tax year 2013. In fact, some of the available tax credits don’t expire until the end of 2016.
Energy Efficient Upgrades
It’s possible for you to receive a tax credit when you make energy efficient upgrades to your existing primary residence. Some of the improvements you can make that are eligible for a tax credit include :
- HVAC upgrades to energy efficient heating, ventilating, and air conditioning systems.
- Installation of a biomass stove.
- Addition of properly rated insulation.
- Upgrade to energy efficient windows and doors.
- Non-solar water heater upgrades.
- Installation of an energy efficient roof (use of metal and asphalt).
This is a tax credit of 10% of your cost, up to a cap of $500, or you can claim a specific amount between $50 and $300 for certain upgrades. Make sure you double-check the upgrade you made before you claim the tax credit. You should also have appropriate documentation for the credit. This tax credit is available through December 31, 2013.
Certain Renewable Energy Systems for Your Home
Unlike the above tax credit, you can use this credit on new construction, as well as on an existing home. You can also take the tax credit for renewable energy system installation on a second home, as well as on your primary residence. You can’t receive the tax credit for a rental.
The systems that are included in this tax credit include :
- Solar energy panels/systems.
- Residential wind turbines.
- Geothermal heat pumps.
These systems can be rather expensive, but the tax credit can help offset some of the cost. You receive credit for 30% of the cost — and there is no upper limit. So if you pay $20,000 for a renewable energy system, your tax credit is $6,666.67.
You can also check with your local government to see if there are grants and low-interest (or even no-interest) loans to help make the cost of installing a renewable energy system more manageable. This credit is available through December 31, 2016.
Fuel Cells for Your Home
If you want to add fuel cells to your home, you can receive a tax credit. In this case, you can receive a tax credit of 30% of the cost, up to $500 per 0.5 kW of power capacity in your system. This means you will have to perform the proper calculations in order to document your tax credit.
With this credit, you must add the fuel cells to your principal residence. It can be an existing home or new construction, but you can’t claim the credit for fuel cells added to a second home or a rental. This credit is available through December 31, 2016.